Thessally Resources view prospects in Australia’s magnesite market

By Andrew Scogings, IM Correspondent, and Rob Barnett *

One of the exploration licences (EL 27724) covers an area of magnesium mineralisation which is locally called the Huandot Magnesite Deposit and which has been estimated to contain a mineral resource of 4.6m tonnes at 43.4% MgO, 0.66% CaO, 0.76% Fe₂O₃, 0.26% Al₂O₃, 0.11% SiO₂ and 5.9% Insolubles to approximately 45 metres depth.

The Huandot deposit is located approximately 70km south of Darwin and is adjacent to sealed roads, including the Stuart Highway and the Batchelor to Rum Jungle Road, as well as the Darwin to Alice Springs railway (Figure 1). It is also close to major infrastructure such as high voltage power, gas and water.

The Huandot magnesite deposit was first evaluated by BHP during 1979-1983 for refractory grade material. Metallurgical work (by Grundstofftechnik Germany) showed a low silica (0.8%) product suitable for refractory grade could be made from the samples. It was subsequently evaluated as a raw material for magnesium metal production by Commercial Minerals Ltd. Based on a 26,000 tonne bulk sample sent in 1995 to Norsk Hydro in Canada, the quality was suggested to be comparable with Norsk’s required specifications.

More recent investigation by Thessally demonstrated that the raw material could be used as a feedstock for production of caustic calcined magnesia (CCM) and dead burned magnesia (DBM). Lab calcination testwork to date concluded that: “There is unlikely to be any major impediment to using the crushed magnesite for CCM production, or selling it in its raw state for most established applications.”

Thessally is presently investigating market opportunities for the development of the Huandot magnesite deposit. The company has compiled and validated the historic data on the known resource and has planned a work program to demonstrate the resource potential and product quality, including process options to remove silica.

Initial conceptual studies has provided confidence that the location of the project, with respect to key infrastructure and the shallow, continuous and pure nature of the project, provide the opportunity to consider a variety of development scenarios.

The mineralisation remains open at depth and along strike and, assuming it extends to at least 90- 20 metres vertical depth, there may be a further 5-10m tonnes magnesite as a potential exploration target immediately below the current defined resource. This figure could rapidly be increased when strike extensions are taken into account.

Magnesite definition and genesis

Magnesite is the mineral name for MgCO₃ with a theoretical MgO content of 47.8% MgO and 52.2% CO₂. Deposits of magnesite are of two main types; (i) macrocrystalline or sparry rocks (Wilson, 2013) where Mg solutions have altered dolomite to magnesite, and (ii) cryptocrystalline magnesite replacing ultramafic rocks within the weathered profile. Other types of magnesite, such as sedimentary beds, crystalline magnesite replacement in ultramafic rocks and saline brines, do occur but are of secondary significance from an economic point of view. Also a pure form of magnesia (MgO) is produced from sea water.

Crystalline magnesite formed from Mg metasomatic replacement in dolomites can contain both calcite and dolomite as impurities as well as silica, if chert was present in the original dolomite. In cryptocrystalline magnesite impurities are siliceous minerals such as serpentine and quartz. Other impurities can include iron and manganese oxides and silicates of Ca, Al, Mn and Fe.

As noted by Wilson (2013) the quality of sparry-type magnesite may be improved by removing silicate minerals during a flotation stage, while cryptocrystalline magnesite can be upgraded by hand sorting or more automated methods such as optical and magnetic sorting.

Magnesite markets and producers

Magnesite loses CO₂ when heated above 800¡C with a firing range of 800¡C to 1000¡C, resulting in a caustic (ie. reactive) magnesia (CCM) and a firing range of 1,450¡C to 1,600¡C, resulting in a dead burned magnesia (DBM) in which the MgO occurs as the periclase mineral phase. At very high temperatures; i.e. 3,000¡C a fused form of magnesia (FM) is produced.

The main commercial use of magnesite is as DBM in refractories. CCM and FM are also important markets, though secondary to DBM. In the form of raw magnesite the mineral has a limited direct market, with soil conditioning being one example.

Work to date by Thessally has focussed on the production of CCM, but it is intended to investigate the potential to process further to DBM.

In 2012 USGS data shows world production capacity of CCM as 2.72m tonnes MgO and DBM as 7.64m tonnes MgO (Bray, 2012). Australia’s share of this production capacity in 2012 was 8% CCM and 1.4% DBM. China dominates the supply of CCM with 53% of production capacity. Russia (3.4%), Spain (5.5%), and Brazil and Canada (3.5%) are other significant CCM producers, according to the USGS.

The production of CCM is mainly based on the product being a precursor for DBM and FM. In the form of CCM the product supplies a wide range of end users (34 being a number quoted at the IM MagMin conference in June 2014) with agriculture and water treatment being the main industrial markets. The bulk; ie. 90%; of CCM product is based on natural magnesite with the remaining 10% sourced from seawater and saline brines.

The largest market for CCM is animal feed where magnesium is critical in dietary requirements for cattle, sheep and other livestock. It is estimated that the present worldwide consumption of CCM in animal feeds is about 470,000 tonnes but this is forecast to grow to about 600,000 tonnes by 2020, mainly due to changing dietary habits in Asian countries.

The second key market for CCM is in wastewater treatment where the product is a competitor material to lime. Both materials serve the key purposes of neutralisation and precipitation of heavy metals.

There are a number of positive aspects to using CCM over lime; eg. in the case of neutralising sulphuric acid waste streams the reaction with magnesia (in the form of magnesium hydroxide) produces soluble magnesium sulphate, while the reaction with lime produces slightly soluble calcium sulphate which leads to blocking of resultant filtercakes.

Other significant markets for CCM are pulp and paper, fertilisers, iron and steelmaking and hydrometallurgy. Minor uses are numerous and varied, including as a vulcanising agent in rubber and as a viscosity agent in drilling muds (Harben, 2002; Kramer, 2006).

At the IM MagMin June 2014 conference, the point was made by a panel of experts that, “A lack of investment in research and development for CCM is preventing the sector from realising opportunities to expand the market.” A number of reasons were put forward for this including the low level of CCM industry profitability, a perceived lack of patentable outcomes for R&D and the use of CCM as a precursor for DBM.

Magnesite specifications and prices

As the main products from magnesite mines are in the calcined MgO form, this is how the product specifications are quoted. For CCM produced from natural magnesite the range of MgO is 85-95%, with 85-90% MgO being the typical range for animal feeds and fertilisers and 90-95% MgO for bulk industrial applications such as construction and paper processing.

The grades of DBM are also variable with grades supplied from China (36% of world production capacity - USGS 2012) quoted as 90%, 92%, 94-95% MgO (IM July 2014). There is also a high grade of 97.5% MgO quoted but it is likely that this is not sourced from a natural magnesite.

The main Australian producer is QMAG (Queensland Magnesia) which mines a cryptocrystalline magnesite deposit. This company sets the benchmark for magnesia in Australia and, as such, the company product specifications are relevant (Table 1). Prices for DBM are available without restrictions, but those for CCM are less so.

Deposit setting, geology and exploration

Magnesite was first noted in the Coomalie Dolostone in 1968 at the Mount Fitch uranium deposit and may be classified as ‘macrocrystalline magnesite’ which is typically formed when magnesia-rich fluids cause alteration of limestone or dolomite.

Exploration for magnesite in the late 1970s to early 1980s by Geopeko and BHP Exploration indicated the presence of a significant magnesite resource. This was followed in 1990-1993 when Nircon Resources/Aztec Mining drilled over 1,700m across the magnesite deposits and estimated a resource of 5.8m tonnes (Table 3).

In 1994 the Huandot (ERL128) deposit was acquired by Normandy Mining Ltd, and its subsidiary Normandy Industrial Minerals Ltd (NIML), who drilled 3,500m RC and estimated a Mineral Resource of 4.6m tonnes at 43.4% MgO, 0.66% CaO, 0.76% Fe₂O₃, 0.26% Al₂O₃, 0.11% SiO₂ and 5.9% Insolubles. Analyses (including 1996 re-analyses of the diamond drill core) were by EDTA and/or an acid digest method supplied by Norsk Hydro Canada Inc.

At Huandot, the magnesite occurs as an elongate lens, 80-120 metres wide, along the western and south-eastern limbs of a north east plunging syncline, referred to locally as the Huandot syncline (Figure 3). The most extensive magnesite zone (western zone) is >500 metres long on the western limb, which dips east at about 50-60¡. A separate magnesite concentration (eastern zone) occurs on the south-eastern limb, which dips to the north-north-west at 40-50¡. The synclinal axis plunges to the north-north-west at 40-60¡.

Karst weathering has created a very irregular surface on the massive high-grade magnesite. This weathering is more intense in the keel of the syncline between the two deposits and extends to a depth of 40-50 metres (Lines, 2012). Depth to massive unweathered magnesite on the limbs of the syncline varies from zero to approximately 20 metres (Figure 4). Reasonably large solution cavities were encountered within the massive magnesite during extraction of the bulk sample and during subsequent drilling programmes.

NIML estimated the resource using block modelling and an SG of 2.95 g/ml. NIML’s Mineral Resource estimate is all within approximately 45 metres of the surface. As highlighted in Figure 4, there is potential to significantly extend the resource at depth and along strike.

Laboratory testwork

A small 7kg sample of outcropping magnesite was submitted to Grundstofftechnik Gmbh of Essen, Germany, in 1980, and, according to flotation test results, it was concluded that a low silica product could be produced for the refractory industry.

During 1995 a 26,000 tonne bulk sample was mined, screened to 90% passing -100mm + 10cm and washed. Testwork by Norsk Hydro in Canada indicated that the quality was generally comparable with the company’s ‘SPEC-100’ grade (Table 4).

Subsequently, during 2013, Thessally had a number of pieces of magnesite from stockpiles at the deposit tested for calcining properties. While not necessarily representative of the entire resource, these samples were expected to be indicative of the initial mine product.

Visually, two crystalline groups were chosen for assessment; (i) finer-grained sample ‘UK’ (Figure 5) and, ii) coarse-grained sample #14. The samples were cut into blocks for calcination tests which took place in a large static muffle furnace. The small specimens of magnesite were photographed, measured, weighed and heated from 200 ^oC to 875 ^oC with a temperature rise profile of 7.5 ¡C per minute and retention time similar to that which would be experienced in a commercial kiln.

Key outcomes of the calcining tests were: no significant decrepitation or spalling throughout the calcination process, good dimensional stability, strength and abrasion resistance, which indicated that a mix of these magnesites would withstand a typical gas fired multiple hearth furnace used for the production of CCM.

A petrographic thin section and SEM study of sample ‘UK’ during 2014 confirmed that it is predominantly composed of magnesite (>95%) which forms a medium grained (0.5-1 mm) interlocking mosaic of sub-rhombic bladed crystals (Figure 6). Accessory minerals include patches of magnesium chlorite, plus rare quartz. According to SEM analysis the typical magnesite composition is 46.5% MgO, 0.9% CaO. 0.6% FeO, which is comparable with the whole rock XRF analysis presented in Table 5.

Summary

Thessally Resources’ Huandot deposit is located approximately 70km south of Darwin and is close to major infrastructure such as sealed roads, the Darwin to Alice Springs railway, high voltage power, gas and water.

During 1995 a 26,000 tonne bulk sample was mined, screened to 90% passing -100mm + 10cm and washed. Testwork by Norsk Hydro in Canada indicated that the quality was generally comparable with the company’s “SPEC-100” grade.

Normandy Industrial Minerals Ltd (NIML) estimated a Mineral Resource of 4.6Mt at 43.4% MgO. Lab calcining tests in 2013 indicated that the magnesite could be suitable for CCM production.

Thessally has compiled and validated the historic data on the known resource and has planned a work program to demonstrate the resource potential.

The company is presently investigating opportunities in natural magnesite, CCM and DBM markets.

Acknowledgements

The management of Thessaly Resources is sincerely thanked for access to the company’s database and for permission to publish this short report.

Authors

Andrew Scogings (MAIG, MAusIMM) holds a PhD in geology and is a director of KlipStone Pty Ltd

Rob Barnett (FGSSA, Pr. Sci. Nat) holds a MSc in industrial mineralogy and is an associate industrial minerals consultant at KlipStone Pty Ltd

www.klipstone.com.au

References

Bray, E. L., 2012. USGS 2012 Minerals Yearbook, Magnesium Compounds.

Harbin, P. W., 2002. Magnesium Minerals and Compounds. The Industrial Minerals Handybook. A Guide to Markets, Specifications and Prices, 194-207.

Kramer, D. A., 2006. Magnesium Minerals and Compounds. Industrial Minerals & Rocks. Commodities, Markets, and Uses. 7^th Edition, 615-629.

Lines, M., 2012. Review of Preliminary Economic Assessment Parameters. Huandot Magnesite Deposit, Batchelor, Northern Territory.

Wilson, I., 2013. Global update on magnesite resources and production. Industrial Minerals Magazine, September 2013.